Pension discourse needs sober reflection
The proposed new regulations on retirement benefits that have caused public outcry need the responsible authorities, particularly Namfisa and the finance minister to offer timely clarifications that will avert the status quo degenerating into what it should not such as mass resignations.
Under the Financial Institutions Markets Act (FIMA) and in terms of the draft regulations, it is proposed that members who leave a pension fund before retirement or early retirement age are compelled to preserve at least 75 percent of their accumulated benefits.
The proposal, now in draft regulation form – Regulation RF.R.5.10, will be issued if approved under the Financial Institutions and Markets Act.
FIMA, which was gazetted on September 30 2021 is expected to replace the outdated Pension Fund Act of 1956, and will be implemented as of October 1 2022.
While these realities are on the table, myths and unsubstantiated narratives around why the regulations are being proposed such that government wants to use pension money to finance is operations, need to be urgently debunked if pension insecurity is to be curtailed.
The discourse on social media has been revelation to gross mistrust that characterises the relationship between pension funds and their beneficiaries.
Thus, if not managed properly, many beneficiaries may seek to withdraw their pensions before October and depending on the number of people that take this route, we may also see the collapse of some pension funds.
Already deepening the scourge of distrust has been lack of consultation as alluded to by the workers’ unions and a series of letters that have been written by fund managers who also claim that they never approved or endorsed the withholding of retirement benefits.
“The impression that is now being created that the trustees accepted/approved/recommended this compulsory preservation clause is absolutely not correct,” principal officer of the Universities Retirement Fund, Antoinette de Greef said in one of the letters released this week thereby creating a rift between policymakers and workers.
In a similar sentiment, NamWater, in a leaked staff letter, also reiterated that the regulations were not accepted by its trustees. “The trustees always have and will continue to act in the best interest of you, the members,” NamWater stated.
Principal officer of the NamPower Provident Fund echoed the same sentiments and explained that when a member leaves the service of the company before retirement by way of resignation, dismissal or retrenchment, their benefit in the NamPower Provident Fund becomes payable to the member.
In light of some the above rebuttals, it is critical that stern assurance to members of the public that the Namibian occupational pension funds are safe and the proposed regulations are still under consultation and not yet passed into law.
If the intention is to pass them into law, then resolute assurance, with adequate education on why the regulations are good for workers should be rolled out as a matter of urgency.
The current gap that exists between the inherent ideas of the policymakers and the workers can no longer be allowed to remain. It is time to offer full clarity and allay all fears that the workers have been gripped with over the past weeks.